European stocks rise

2010-12-13 13:53

London - Europe's main stock markets rose on Monday following strong gains across Asia and amid takeover activity involving the energy and pharmaceutical industries.

Approaching midday trade, London's FTSE 100 index was up 0.62% at 5 849.26 points.

Frankfurt's DAX 30 index gained 0.28% to 7 026.11 points and in Paris the CAC 40 grew 0.60% to 3 880.62 points.

The Stoxx 50 index of leading eurozone companies gained 0.46% to 2 852.64.

Asian stock markets closed higher even as official data showing unrelenting inflation in China raised pressure for an interest rate hike in the Asian country.

China on Saturday said that inflation topped five percent for the first time in more than two years.

The country's consumer price index rose a faster-than-expected 5.1% year-on-year in November as food costs continued to soar.

It was the fastest increase in consumer prices since July 2008, when inflation hit 6.3%, and was well above the government's full-year target for three percent.

"The mining companies are leading the way today (in London) ... on the back of stronger metals prices, despite the higher-than-expected inflation figures from China over the weekend," said David Jones, an analyst at IG Index trading group.

"In the past these sorts of releases have knocked sentiment in the miners due to worries about China taking steps to try and moderate growth, but the fact that there has been no suggestion of interest rate rises has been met with relief and helped support this rally.

"This has put the FTSE at its best level in more than a month, leading many investors to hope, that like Christmas, the Santa rally appears to start earlier every year," Jones added.

The energy sector was also in focus as a Chinese oil firm signed a deal with Norway's Statoil, while US industrial conglomerate General Electric launched a friendly takeover for British oil services company Wellstream Holdings worth $1.3bn (€982m).

Elsewhere, the world's largest printer of banknotes De La Rue, which is currently mulling a takeover approach from a French rival, said it had chosen Tim Cobbold to be its new chief executive.

Cobbold, former chief executive of British power systems group Chloride, is taking over from James Hussey, who resigned in August after De La Rue revealed banknote production failures.

The appointment comes one week after French banknote printer and chip card maker Oberthur Technologies announced a takeover bid for De La Rue worth about £900m (€1.1bn, $1.4bn).

Household goods firm Reckitt Benckiser meanwhile said it had agreed to buy Indian company Paras Pharmaceuticals for about £460m (€549m, $726m).